Strategic Information System : Conduct of Operations

Discuss about the Strategic Information System for the Conduct of Operations.

Accounting Software/Packages Used In Australia

A majority of businesses in Australia before 2002 were contended utilizing paper-based accounting systems to conduct their operations. However, the introduction of Goods and Services Tax (GST) resulted in many of them switching to the use of accounting software. The Australian government played an essential role in their switch because it covered the cost of acquiring the software package (James & Maher, 2013: 1). Some of the most famous software packages in the country include Xero, Saasu, Reckon, MYOB, and Intuit QuickBooks.

Intuit QuickBooks

It is the most valued accounting software in Australia, and it is famous among business owners. Its popularity is attributable to two main factors including security and price. Regarding price, business owners pay $12/month and $21/month for basic software and premium version respectively (AdvisoryHQ, 2015: 3). In addition to being cheap, the software is defined by comprehensive features that permit business owners to track their profits, expenses, and income. Likewise, through the software, business owners can use various desktop and mobile platforms to access their data virtually, send an unlimited number of invoices, make payroll payments without incurring any costs and pay/manage bills (AdvisoryHQ, 2015: 4).

MYOB

MYOB is also considered among the best accounting packages in the country because its primary objective is enhance the experience of business owners by providing other services. The software was developed from scratch with the main objective of carrying out routine accounting functions. Additionally, it was designed to support business owners in increasing their profitability and making informed decisions about financial operations of their firms’. Through MYOB, business owners can integrate their business processes with the point of sale transactions. The unique attribute of this software is that it operates both offline and online making it somewhat difficult for customers to realize when there are problems with internet connection. MYOB users are charged between $ 50 and $99 per month depending on the version being used (AdvisoryHQ, 2015: 5).

Reckon

The primary objective of Reckon is to become the most outstanding accounting software among bookkeepers, accountants, and businesses in Australia. It is acknowledged as the most inexpensive cloud accounting software for both medium and small-sized businesses. The package allows business owners to accept credit and card payments through the phone. It also provides a comprehensive and complete point of sale systems that connects businesses sales transactions and desktop software suite. Some of the unique features that define this software include credit management, value billing, practice IQ, resource planning, document portal and management (AdvisoryHQ, 2015: 3). Other features include client relationship management, corporate registration, digital imaging, business process automation, and tax procession. Users pay from $ 5 per month.

Saasu

The software permits Australian businesses to conduct cash flow cashing minus extra syncing or setup. It is easier for business owners to connect their Saasu accounting platform with their email platform, e-commerce store, and customer relationship management. Through this package, business owners access smart bank fees that enable them to efficiently and quickly conduct bank reconciliations resulting in saving of more time (AdvisoryHQ, 2015: 3)

Xero

As online accounting software, Xero is popular among Australian business owners because of its data monitoring capabilities. At the moment, it has about 500,000 subscribers (Curtis, 2014: 25). The software provides its users with rapid online invoicing, and its advanced reconciliation process permits users to categorize and import their bank transactions. Other benefits accrued from Xero include effecient management of payroll taxes, easy to compute payroll and pay staffs. Its subscription is from $9/month to $70 for starter and premium accounting versions respectively (GrowthPath Profit Engineers, 2015:10).

Analysis of the Main Players in the Accounting Software/Packages used in Australia and their Competitive Advantage

The main players in the accounting software market in Australia are Xero, Intuit, and MYOB. These three cloud accounting companies compete for supremacy in the accounting software market. All Australian businesses are in pursuit of keeping track of their accounts, and the three companies make their work easier. For instance, they eliminate the need for bookkeeping and permit businesses to make cash flow management and invoicing decisions via mobile and desktop applications. The following is a detailed analysis of the above players and their competitive advantage in the accounting software market.

Xero

As a New Zealand-born firm, Xero targets both small businesses and accounting firms in its promotional campaigns. The company spends approximately $ 250 million to design its software. As a consequence of these developments, the company by 2014 had more than 400,000 subscribers across 180 countries in the world (Macpherson, 2015: 3). In the same year, the company was processing about 95 million invoices and $ 240billion transactions. The success of the company in the Australian market is attributable to its strong ecosystem and network that refers accounting partners. Likewise, Xero accounting software is the most innovative and easy to use. It is also the leader in small and micro businesses (Smith, 2015: 58).

 Intuit

Intuit is the United States based giant company and has recently entered the Australian market. In 2014, the company increased the number of its staffs in the Australian market to 60 and acquired two companies including Fifo and Invitco. Invitco is a PDF data extraction company that primarily focuses on automating the extraction of data from bills and entering accounting software data. Fifo Company, on the other hand, is a practice management software business. Strong interface and allowing businesses to channel their attention on cash flow are the main competitive advantage of this company

MYOB

It is the largest small and medium enterprise accounting player in the market (Australian market). In 2014, the company rebranded its goods to MYOB Accounting Essentials from MYOB LiveAccounts. The company has operated in the Australian market for several years, and it is the main threat to Xero. The primary competitive advantage of the above company is that is a strong brand in the market and a steady performer, and its accounting features allow businesses to recognize invoices and bills (Redrup, 2015: 16).

Current Market Share

The market share has considerably transformed in the last decade. For instance, Xero makes up 65% of the market share whereas Intuit is responsible for 20%. Compared to Xero and Intuit, MYOB’s accrues more revenues (Heber, 2015:5). The table below gives a preview of Xero and MYOB performance in the Australian market.

Provider	Average revenue per user	Annual Churn	Customer Life Years	Gross Margin	Long-term Valuation(LTV)	FX	LTV(A$)
Xero Australia	$ 34	13%	7.6	68%	$ 2,083	NZ$	$1,929
Xero New Zealand	$ 24	11%	9.3	66%	$ 1,745	NZ$	$1,616
MYOB Cloud	$50	17%	5.9	85%	$3000	A$	$3,000
MYOB Desktop	$70	26%	3.8	90%	$2,908	A$	$2,908

The Current Challenges Encountered By Users Or Customers Of Accounting Software/Packages

There are various challenges that customers of accounting software/packages are subjected to in the Australian market. To start with, the software’s subscription plans and cloud services lock them into various payment systems. For this reason, it becomes somewhat challenging for customers to switch between programs. Another challenge associated with the use of the accounting packages is data security. Data security issues are attributable to the fact that that online content might be susceptible to fraud, hackers, and other virtual threats (R& G Technologies, 2014: 2). There is also a tendency of the companies increasing their fees if customers fail to use their products appropriately (James & Maher, 2013: 7). Equally, some customers are lured into using an accounting package that does not meet their business needs.

Recommendations for Accounting Software Companies

Data security issues can be addressed by accounting software provider companies channeling adequate resources in security design and architecture in addition to executing best industry practices (Petkovic? & Jonker, 2007: 5). To avoid charging customers an extra fee for not using their software appropriately, it is paramount that users are properly trained. Through the training, customers will make sure that they chose software that meets their business needs because no one size fits all.

References

AdvisoryHQ.(2015) 5 Best Small Business Accounting Software in Australia. [Online], Available: http://www.advisoryhq.com/articles/5-best-small-business-accounting-software-in-australia/

Curtis, V. (2014)  Bookkeeping Essentials for Dummies, Stafford, Qld. : John Wiley & Sons Australia Ltd.

GrowthPath Profit Engineers.(2015). Review of Xero, Sasu, QuickBooks Online and MYOB. [Online], Available:  https://www.growthpath.com.au/Business-IT/review-of-myob-liveaccounts-and-xero-accounting-in-the-cloud.html

Heber, A.(2015)’ The Cloud Accounting Supremacy War in Australia’, Business Insider. [Online], Available: http://www.businessinsider.com.au/charts-the-battle-for-supremacy-in-australias-cloud-accounting-market-2015-4

James, D., & Maher, W.(2013) ‘7 Accounting Packages for Australian Small Businesses Compared: Including MYOB, QuickBooks Online, Reckon, and Xero’ Business IT News. [Online], Available: http://www.bit.com.au/Review/344651,7-accounting-packages-for-australian-small-businesses-compared-including-myob-quickbooks-online-reckon-xero.aspx

Macpherson, S.(2015)’ Choosing the Right Online Accounting Software’,  In The Black. [Online], Available: https://intheblack.com/articles/2015/04/01/competing-for-australias-small-accounting-businesses

Petkovic?, M., & Jonker, W. (2007) Security, privacy and trust in modern data management, Berlin, Springer.

R& G Technologies.(2014). MYOB: Benefits and Challenges for Your Organization. [Online], Available:  http://blog.rgtechnologies.com.au/myob

Redrup, Y. (2015) 'MYOB 'competing strongly' with Xero, as SMEs drive cloud growth', Australian Financial Review, vol.4, no.2 , p. 16.

Smith, H. N. (2015)  Xero for dummies. Richmond, Vic. : John Wiley and Sons Australia.

 

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